Summary
In the mango sector stricter EU phytosanitary controls on non-European fruit fly (Tephritidae) could halt the strong growth in ACP mango exports to the EU market which has been underway since 2008. Stricter EU controls could make it commercially non-viable for smaller scale ACP exporters to continue to enjoy entry to the EU market. In this context the extent to which the UK will apply evolving EU phytosanitary controls under a no-deal Brexit scenario could take on some significance for smaller scale ACP mango exporters. Put simply risk assessments based solely on agro-climatic conditions in the UK may come to quite different conclusions than risk assessments based on the diverse agro-climatic conditions across all EU27 member states. In this context if the UK were to design phytosanitary controls based solely on the threat to agriculture and human health in the UK these may prove to be far less strict than the controls now being introduced by the EU. This is an issue which could usefully be taken up in ongoing Continuity Agreement negotiations with the UK, particularly in the context of the “Annex of Concerns” approach now being canvassed as a mean of ensure forward looking trade arrangements with the UK are set in place. Trade arrangements which take into account the changed economic realities and commercial possibilities which the UK’s withdrawal from the EU customs union and single market will or could bring about. Read more “New EU Plant Health Regulation on Non-European Fruit Fly Could Put Squeeze on Smaller ACP Mango Exporters”
Category: West African EPA
UK Procedures for SPS Inspections of Plant and Plant Products under a No-Deal Brexit
Summary
If the EU no longer carries out necessary phytosanitary checks on plants and plant products imported into the UK via EU27 member states, the UK will need to apply standard 3rd country phytosanitary controls to ACP plant products exported to the UK via a EU27 member state. The application of standard 3rd country phytosanitary controls along ACP triangular supply chains could prove disruptive given the UK government’s current planned system of controls. These controls are seen as commercially non-viable by operators involve in current triangular supply chain arrangements. There is therefore an urgent need for ACP governments whose exporters are involved in triangular supply chains involving the affected products to secure from the EU authorities a firm commitment that necessary plant health checks on products destined for the UK market will continue to be carried out in the EU27. Read more “UK Procedures for SPS Inspections of Plant and Plant Products under a No-Deal Brexit”
EU Council Agrees Article 50 ‘Flextension’ Until 31st October 2019
Summary
The EU Council has agreed an extension of the Article 50 process until 31st October 2019. The UK will be bound by the same rights and obligations as other EU members during this period. This extension period could come to an end earlier if the Withdrawal Agreement is ratified. In this context while there is now time to find a negotiated position this would require: ratification of the Withdrawal Agreement; revising the UK’s whole Brexit strategy or revoking Article 50. This will hinge solely around political developments in the UK. The prospect of a ‘no-deal Brexit’ remains, with critical decision points relating to the conduct of European Parliament elections in the UK, and the June 21st EU Council review of the Brexit process. In addition a ‘no-deal Brexit’ or a ‘hard Brexit’ could still occur on the 31st October 2019. Against this background ACP EPA signatories will still need to retain the option of signing Continuity Agreements with the UK if a ‘no-deal Brexit’ looks imminent. Even under a ‘hard Brexit’ ACP governments would need to address the range of issues identified as requiring the inclusion of a detailed “Annex of Concerns” in each of the concluded Continuity Agreements. This will be vital to ensuring both a smooth transition to post-Brexit trade relations with the UK and the future value to ACP exporters of the rolled over tariff preferences which Continuity Agreements seek to enshrine in ‘UK only’ trade agreements with ACP countries. Read more “EU Council Agrees Article 50 ‘Flextension’ Until 31st October 2019”
Pressure Mounts on Cameroon, Ghana and Cote d’Ivoire to Sign UK Continuity Agreements to Protect Banana Exporters
Summary
Ecuador, Colombia and Peru are set to sign a Continuity Agreements with the UK, thereby ensuring continued reduced duty access to the UK market for their banana exporters. These Andean Pact countries accounted for 43.6% of UK banana imports and alongside the Continuity Agreement concluded with CARIFORUM countries ensures a continuation of current terms and conditions for banana imports which, in 2017 accounted for almost 64% of total UK banana extra-EU imports. This increases pressure on Ghana, Cameroon and Cote d’Ivoire to speedily conclude Continuity Agreements with the UK in the event of a no-deal Brexit. Any imposition of UK MFN tariffs would undermine the commercial position of African banana exporters, de facto amounting to a 15.4% import tax on bananas from the main African exporting countries. Read more “Pressure Mounts on Cameroon, Ghana and Cote d’Ivoire to Sign UK Continuity Agreements to Protect Banana Exporters”
Which ACP EPA Signatory Countries Would be Most Vulnerable to a 12th April No Deal Brexit?
Summary
With the ending of the two year notification period set out under Article 50 of the EU Treaty and the House of Commons having rejected the Withdrawal Agreement for a 3rd time, the Brexit process is on borrowed time. The UK government will now have to submit an alternative way forward in the Brexit process if a no deal Brexit is to be avoided on the 12th April 2019. While this may include a longer extension of the Article 50 period beyond the 2 weeks the EU Council has currently granted, the prospect of a no-deal Brexit on 12th April cannot be ruled out, despite a huge 240 Parliamentary majority against the UK leaving the EU without a deal. Against this background, after providing an update on the Brexit process in the UK, this article reviews the situation of ACP countries and regions which currently trade with the UK under an EU EPA. Read more “Which ACP EPA Signatory Countries Would be Most Vulnerable to a 12th April No Deal Brexit?”
Brexit Delayed but No Deal Brexit Still on the Table
Summary
While the UK has sought an extension of the Article 50 process, the EU Council has limited the duration of the extension granted, with this being conditional on approval of the Withdrawal Agreement. Failure of the UK Parliament to approve the Withdrawal Agreement would require an alternative way forward to be identified if the UK was not to leave under a ‘no-deal’ scenario on 12th April. While the UK’s unilateral EBA style trade regime for LDCs and the signing of a ‘Continuity Agreement’ will ensure continuity in tariff treatment for access to the UK market, these agreements will not on their own ensure continuity in trade flows nor continuity of the value of current ACP DFQF access beyond June 2020. For this to be achieved both additional special arrangements will need to be set in place immediately upon the UK’s withdrawal and a multiplicity of supplementary commitments will be required from the UK government if the current value of ACP trade arrangements with the UK is to be preserved and enhanced. Read more “Brexit Delayed but No Deal Brexit Still on the Table”
Why Eliminating UK MFN Tariffs on Bananas Would be Bad News for ACP Banana Exporters
Summary
While the UK Secretary of State for International Trade has committed to taking account of the impact the removal of MFN tariffs would have on the preferential treatment accorded developing countries, there remain persistent rumours that given the absence of any domestic UK production, bananas would be one of the first products where existing EU MFN tariffs would be eliminated. However such a move would bring only marginal benefits to UK consumers, with the banana pricing policies of UK supermarkets having a far greater impact on the final purchase price of bananas than the MFN tariffs applied. This would however see a significant erosion of the competitive position of mainly Commonwealth African and Caribbean banana exporting countries which are focussed on the UK market in their banana export trade with the EU. This could cause considerable harm to these banana exporting economies, in a context where the banana sector not only providing significant livelihood opportunities in rural areas in the main banana exporting countries but where it is also providing the commercial basis for the development of variety of new non-traditional fruit exports to the UK market. Read more “Why Eliminating UK MFN Tariffs on Bananas Would be Bad News for ACP Banana Exporters”
Growth in EU28 poultry meat exports to ACP markets could accelerate under a no deal exit of the UK from the EU
Summary
SPS restrictions on poultry meat imports from Brazil saw EU poultry meat production expand in 2017 despite AI outbreaks. This highlights how important trade measures can be in stimulating domestic poultry meat production. In the face of AI related import bans EU poultry meat exporters have found new alternative markets for exports in Africa. The projected 3.9% expansion of EU poultry meat production to 2030 will drive a further expansion of exports (+18.4% or +219,000 between 2018 and 2030), with growing volumes of poultry parts being exported to Africa at progressively lower prices. Given likely Brexit related disruptions of the EU27/UK poultry meat trade, export growth to Africa could be even higher, particularly for UK poultry parts exports of which are currently concentrated on EU27 markets. Potential Brexit related trade effects are not factored into current EU projections. ACP governments may need to use non-tariff trade policy tools to protect against sudden import surges, with this potentially becoming a contentious issue. Additional SPS issues arise from the growing level of processing of Ukrainian raised chickens in the EU, parts of which are then exported as EU chicken to ACP markets. Read more “Growth in EU28 poultry meat exports to ACP markets could accelerate under a no deal exit of the UK from the EU”
Fairtrade Premium and Minimum Price for Cocoa to be Raised but Broader Industry Initiative Needed
Summary
The Fair Trade cocoa price will be increased 20% from October 2019, with this being described as good news by West African cocoa farmers’ representatives. However large numbers of African cocoa farmers continue to live in poverty despite 10 years of corporate efforts to promote greater sustainability in the cocoa sector. For poverty levels to be sustainably reduced price volatility will need to be addressed. Ways need to be found to integrate a sustained increase in the net real value of retained income of cocoa farmers within sustainability schemes, whilst at the same time avoiding the poorest cocoa farmers simply being excluded from individual corporate sustainability initiatives. Moving beyond ‘box-ticking’ when it comes to poverty levels in the cocoa farming sector, will need to recognise the structural link between the ‘lower raw material prices’ which boosted the Barry Callebaut Group’s profits by 31% and the continued high levels of poverty amongst African cocoa farmers. Read more “Fairtrade Premium and Minimum Price for Cocoa to be Raised but Broader Industry Initiative Needed”
Is the Final Count Down to Brexit Underway or Will the ACP have Three More Months to Take Action to Mitigate the Trade Disruption Effects of No Deal Brexit?
Summary
The UK government has now laid down a clear Parliamentary route to defining a final UK position on the ‘no-deal’ Brexit option. This could lead to an extension of the article 50 process for either 3 month or 21 months. This would provide time for ACP governments to set in place policy initiatives to mitigate the adverse effects of a no-deal Brexit on ACP trade with both the UK and the EU27. This would require the launching of a specific political initiative towards the UK government to ensure three major issue clusters are addressed: the shortcomings of the UK’s existing ‘Continuity Agreement’ approach; the trilateral administrative arrangements required to ensure continuity of trade flows in the immediate post-Brexit period and the value of existing DFQF access granted ACP countries is retained through accommodating ACP concerns in the UK’s future MFN tariff schedule. It would also require the launching of a political initiative towards the EU to ensure issues in future EU27 relations arising from the UK’s departure from the EU are fully addressed, so as to reduce the adverse effects of Brexit on ACP economies. Read more “Is the Final Count Down to Brexit Underway or Will the ACP have Three More Months to Take Action to Mitigate the Trade Disruption Effects of No Deal Brexit?”